Oregon Utility to Review PGE Plan Over Data Center Cost Concerns
December 16, 2025
A contentious debate over who should pay for the massive energy demands of data centers is unfolding in Oregon, testing the state's landmark legislation designed to protect residential ratepayers. The Oregon Public Utility Commission (OPUC) is now reviewing a cost-allocation proposal from Portland General Electric (PGE) after the Citizens' Utility Board (CUB), a consumer advocacy group, accused the utility of undermining the intent of the new POWER Act.
The dispute centers on PGE's proposed framework for funding new power supply and transmission infrastructure necessitated by rapid data center expansion. CUB alleges the plan would force residential customers to shoulder 34% to 45% of these costs, despite data centers being the primary driver of new energy demand. This, CUB argues, contravenes the POWER Act, which was signed by Governor Tina Kotek to prevent households from subsidizing the energy-intensive industry and mandates that large data centers cover their own grid costs.
PGE defends its methodology, citing a new "Peak Growth Modifier" tool designed to align costs with demand. "The electric grid and generating resources are built to make sure customers are reliably served at moments when usage is at its highest point – this is peak demand," PGE stated. "The principle is simple: customer groups driving peak-demand growth should pay for the infrastructure needed to serve that growth." The OPUC's decision on the plan is expected by April 2026.
The issue has gained urgency as data center growth accelerates nationwide, fueled largely by artificial intelligence. While data centers currently account for only about 6% of Oregon's electricity consumption, compared to 40% for residential users, their share is projected to surge to approximately 20% by 2030. Oregon is home to 138 data centers, a number poised to grow. The scale of this demand is staggering: a typical AI-optimized hyperscale data center can consume as much electricity annually as 100,000 U.S. homes, with newer mega-facilities using up to 20 times more.
The outcome in Oregon is being closely watched as a bellwether for other regions grappling with similar challenges. Analysts warn that unchecked data center growth could lead to significant increases in electricity bills; one estimate from Carnegie Mellon University suggests U.S. bills could rise 8% by 2030 due to data centers and cryptocurrency mining alone. The OPUC's ruling will set a critical precedent on how the principles of the POWER Act—which created a new industrial customer class for users exceeding 20 megawatts—are implemented, balancing utility infrastructure needs with consumer protection.
Source: katu
